Correlation Between Mxima Renda and Fundos De

Can any of the company-specific risk be diversified away by investing in both Mxima Renda and Fundos De at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mxima Renda and Fundos De into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mxima Renda Corporativa and Fundos de Investimento, you can compare the effects of market volatilities on Mxima Renda and Fundos De and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mxima Renda with a short position of Fundos De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mxima Renda and Fundos De.

Diversification Opportunities for Mxima Renda and Fundos De

-0.37

Correlation Coefficient

Mxima Renda  Fundos De

Very good diversification

The 3 months correlation between Mxima and Fundos is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Mxima Renda Corporativa and Fundos de Investimento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundos de Investimento and Mxima Renda is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mxima Renda Corporativa are associated (or correlated) with Fundos De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundos de Investimento has no effect on the direction of Mxima Renda i.e., Mxima Renda and Fundos De go up and down completely randomly.

Pair Corralation between Mxima Renda and Fundos De

Assuming the 90 days trading horizon Mxima Renda Corporativa is expected to under-perform the Fundos De. In addition to that, Mxima Renda is 9.19 times more volatile than Fundos de Investimento. It trades about -0.13 of its total potential returns per unit of risk. Fundos de Investimento is currently generating about 0.22 per unit of volatility. If you would invest  5,037  in Fundos de Investimento on September 20, 2024 and sell it today you would earn a total of  62.00  from holding Fundos de Investimento or generate 1.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Mxima Renda Corporativa  vs.  Fundos de Investimento

Mxima Renda Corporativa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mxima Renda Corporativa has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Fundos de Investimento

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fundos de Investimento are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Fundos De sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mxima Renda and Fundos De

The main advantage of trading using opposite Mxima Renda and Fundos De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mxima Renda position performs unexpectedly, Fundos De can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fundos De will offset losses from the drop in Fundos De's long position.

The idea behind Mxima Renda Corporativa and Fundos de Investimento pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.